Platinum Asia Investments Limited - Strategic Review Outcome - 24 July 2024
PAI (PAI) Share Update July 2024 Tuesday 23rd
Platinum Asia Investments Limited Announces Strategic Review Outcome
Platinum Asia Investments Limited (ASX: PAI) has announced the conclusion of its formal strategic review, revealing plans to pursue a scheme of arrangement with Platinum Asia Fund (ASX: PAXX).
Instant Summary:
- PAI conducted a strategic review to maximize shareholder value.
- Independent corporate adviser assisted in evaluating strategic options.
- PAI to pursue a scheme of arrangement with PAXX.
- PAI shareholders to receive PAXX units in exchange for PAI shares.
- Scheme subject to legal, tax, operational due diligence, and approvals.
Strategic Review Conclusion
On 26 April 2024, the Board of Platinum Asia Investments Limited (PAI) initiated a formal strategic review to explore options to maximize shareholder value. The primary objective was to reduce the share price discount to the pre-tax net tangible asset (NTA) backing per share.
Following this announcement, the Board appointed an independent corporate adviser to assist in assessing various strategic options. After thorough evaluation, the Board has decided to pursue a scheme of arrangement with the Platinum Asia Fund (PAXX), an open-ended managed fund whose units are quoted on the ASX AQUA market.
Scheme of Arrangement
If the scheme of arrangement is implemented, PAI shareholders will receive PAXX units in exchange for their PAI shares. The number of PAXX units issued to each PAI shareholder will be calculated based on the relative net asset value (NAV) per unit of PAXX and the post-tax NTA backing per share of PAI, adjusted for transaction costs and the impact on PAXX unitholders.
This arrangement will allow PAI shareholders to continue accessing Platinum Investment Management Limited's Asia ex-Japan investment strategy through an ASX-quoted vehicle with the same investment objective as PAI. Additionally, holding units in PAXX, which trade close to their NAV, will meet the Board's goal of closing the share price discount.
Next Steps
The scheme of arrangement is subject to the execution of a binding scheme implementation deed between PAI and Platinum, as well as PAI shareholder and Court approval. The Board aims to provide a further update by the end of September 2024.
The announcement of the scheme of arrangement is likely to have a positive impact on PAI's stock price as it addresses the share price discount issue. By converting PAI shares to PAXX units, shareholders will benefit from a structure that trades closer to its NAV, potentially boosting investor confidence and market perception.
Investor Reaction:
Analysts and investors have responded positively to the strategic review's outcome. Many believe that the scheme of arrangement with PAXX will help unlock value for PAI shareholders and provide a more transparent and efficient investment vehicle.
Conclusion:
Investors should stay informed about the upcoming updates and approvals related to the scheme of arrangement. This strategic move by PAI could offer significant benefits, making it a compelling opportunity for current and potential shareholders.